Doing a no-spend challenge — cutting out all unnecessary expenses for a specific period of time — is important for resetting your spending habits and boosting your progress toward your financial goals like contributing to your Roth IRA or buiding your emergency fund.
However, there are several mistakes that can sabotage your no-spend challenge and actually harm your relationship with money. Here are three pitfalls to avoid when starting a no-spend challenge and here’s what you should do instead:
1. Don’t confuse a no-spend challenge with a low-spend challenge or a normal budget.
Doing a no-spend challenge means only spending money on necessities and cutting out all discretionary spending for a specific period of time. However, many people confuse doing a no-spend challenge with doing a low-spend challenge or even sticking to a normal budget.
Many articles and videos discuss the concept of creating rules to govern your spending during a no-spend month; however, often, the examples of these rules tend to indistinguishable from setting a normal budget because they allow discretionary spending.
For example, one video entitled “I bought nothing for 30 days. Here’s how it went.” details one woman’s spending for what she called “No Buy January.” She spent:
- $72 on sushi
- $107 on nails
- $283 on one book
- $5 on coffee
- $51 on a gift card
- $32 on a fitness class
- $14 on takeout
- another $9 on coffee
- $187 on luxury haircare products
- $30 on Ramen
This video is the perfect example of how someone conflates a no-buy month with that person’s version of budgeting or a low-buy month— although the above spending isn’t particularly frugal at all.
The video exemplifies how people try to set up their no-spend rules to justify discretionary purchases: She decided that she didn’t want to buy any makeup, clothing, home decor, accessories, or skincare products for that month, and although she stuck to the rules of her “no buy” challenge, she ended up spending $790 on discretionary purchases and doesn’t see the irony of calling this a “no-buy month.”
Many people ready think that as long as they spend within those preset limits, they still can say that they’ve successfully completed a no-spend challenge, even if those limits mean that their no-spend month is indistinguishable from a normal budget with money allocated to discretionary spending.
But that’s not what a no-spend challenge is. A no-spend challenge is about cutting out all discretionary spending — not finding ways to justify unnecessary purchases as necessary items.
When you tell yourself that you’re doing a no-spend challenge but you deliberately engage in discretionary spending, you’re telling yourself that discretionary purchases are necessities. You don’t want to get into the habit of telling yourself that discretionary purchases are necessities because this mentality is a major reason why people start a cycle of debt.
If you want to do a no-spend month, don’t do mental gymnastics to try to justify discretionary spending as essential. If you’re having too much trouble cutting out all unnecessary expenses, just do a low-spend month or a stick-to-your-budget challenge instead of a no-spend month.
2. Don’t stock up on items before your no-spend challenge.
Stocking up on items before your no-spend challenge defeats the purpose of doing a no-spend challenge. The whole point of a no-spend challenge is to avoid buying non-essential items, so if you buy those items immediately before your no-spend challenge starts, you’re not changing anything by doing the no-spend challenge.
Equally important is avoiding rebound spending when your no-spend challenge is over, which is spending a lot of money to compensate for the short-term restriction on your budget. You’re not setting yourself up for a healthy relationship with money if you start a cycle of big spending to stock up on one item followed by severely restricting the money you spend on that same item, or purposely spending a lot before doing a no-spend month.
The point of doing a no-spend challenge is to do a long-term reset on your spending habits. That’s not going to happen if you treat doing a no-spend challenge like a crash diet. If you binge spend before or after you do your no-spend month, that’s a sign that your mindset is not in the right place.
When you do a no-spend challenge, your mindset shouldn’t be one of restriction or focusing on what you don’t have—rather, your mindset should be focused on reaching the financial goals that you’re building towards.
3. Don’t track no-spend days.
Many resources on how to do a no-spend challenge will advise you to track your no-spend days. Creating a specific goal for how many no-spend days you want to have in a month initially sounds like a good idea, but the important part of doing a no-spend month is how much money you do (or don’t) spend and how much you’re able to redirect your focus toward your financial goals— not how many days you restricted your spending.
If you only had one day where you bought unnecessary purchases, but you ended up going into massive debt for those purchases, then your bank account doesn’t care that you completed 29 spending-free days that month.
Instead of focusing on the number of days that you were able to avoid making discretionary purchases, consider tracking how much money you’ve been able to save and invest by doing a no-spend challenge.
Focusing on how many spending-free days you have puts your focus on restricting yourself, which tends to lead to failure — if you want to make cutting down on spending a lifestyle change, you need to focus on the benefit you’re getting from changing your spending habits.
Key takeaways
If you’re doing a no-spend month, be honest about whether or not you intend to truly cut out all discretionary expenses; if you don’t intend to cut out unnecessary purchases, just call it a stick-to-your-budget challenge or a low-spend month instead of a no spend month. Don’t get into the habit of trying to convince yourself that discretionary purchases are essential.
Next, instead of stocking up on products before your no-spend challenge, approach your no-spend challenge with the mentality that you want to make a true lifestyle change.
Finally, don’t white-knuckle your way through your no-spend month; instead of focusing on how many days you were able to restrict your spending, get excited about the progress that you’re able to make toward your financial goals.
If you can avoid these common mistakes when doing your no-spend challenge, you’ll not only increase your chances of successfully completing your no-spend challenge — you’ll also set yourself up to have a healthy relationship with money and create a long-term change in your spending habits.